Absolute Reports Fiscal 2016 Fourth Quarter and Annual Results

Reports Continued Acceleration in Revenue Growth

VANCOUVER, Aug. 19, 2016 /CNW/ - Absolute® (TSX: ABT), the industry standard for persistent endpoint security and data risk management, today announced its financial results for the three months and full year ended June 30, 2016. All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.


USD Millions, except per share data

Q4




YTD



F2016


F2015


Change


F2016


F2015


Change

Revenue

$

22.0


$

23.3


(6%)


$

88.8


$

93.6


(5%)


DDS Segment(1)

$

22.0


$

20.6


7%


$

86.0


$

82.4


4%


DDS recurring as % of DDS total


97%



99%





97%



98%



















Adjusted EBITDA(2)

$

1.9


$

2.1


(9%)


$

11.1


$

17.1


(35%)


Adjusted EBITDA as a % of revenue


9%



9%





12%



18%



















Net (Loss) Income

$

(1.2)


$

(0.7)


(68%)


$

9.7


$

4.6


111%


Per share (basic)

$

(0.03)


$

(0.02)




$

0.24


$

0.10




Per share (diluted)

$

(0.03)


$

(0.02)




$

0.23


$

0.10



















Cash from operating activities(3)

$

(1.6)


$

2.7


(158%)


$

4.9


$

23.0


(79%)

















DDS Segment Billings(1),(2)

$

30.1


$

25.4


19%


$

88.6


$

89.4


(1%)

















Dividends paid

$

2.4


$

2.6


(8%)


$

9.3


$

10.1


(9%)


Per share (CAD)

$

0.08


$

0.07


14%


$

0.31


$

0.27


15%

















Cash, equivalents and investments

$

47.6


$

85.8


(45%)









Total assets

$

114.7


$

149.9


(24%)









Deferred revenue

$

138.0


$

135.3


2%

























Common shares outstanding


38.9



44.9


(13%)

























(1)

As a result of the divestiture of the Absolute Manage and Absolute Service business unit (see "Corporate Developments – Divestiture
of Absolute Manage and Absolute Service" in the Company's Fiscal 2016 MD&A), the Data and Device Security operating segment
solely comprises Absolute's ongoing operations. 

(2)

Please refer to "Non-IFRS Measures and Definitions".

(3)

Year-to-date cash from operating activities is net of $1.3 million of transaction fees related to the disposal of the Endpoint and Service
Management business.



Q4-F2016 Overview

Key Financial Metrics

  • Absolute Data & Device Security (DDS) segment revenue of $22.0 million, representing a year-over-year increase of 7% compared to $20.6 million in Q4-F2015. Recurring revenue increased 5% year-over-year and represented 97% of Q4-F2016 revenue
  • The DDS commercial ACV Base increased by 3% globally and 2% in North America
  • Net ACV Retention from existing DDS customers was 100% while incremental ACV from new DDS customers was $1.8 million, with corporate and healthcare customers representing $1 million of the new customer ACV
  • Adjusted EBITDA was $1.9 million, representing 9% of revenue
  • DDS segment Billings were $30.1 million, representing a year-over-year increase of 19% compared to $25.4 million in Q4-F2015
  • Cash used in operating activities was negative $1.6 million

Technology and Products

  • Launched Persistence® Services by Absolute, a new service that enables customers to persistently reinstall software agents from third party software applications such as security or IT management software
  • Released Endpoint Data Discovery (EDD), a new feature within Absolute DDS that allows organizations to identify and protect sensitive data stored on endpoints throughout the enterprise
  • Released a Chromebook™ extension to the Absolute Mobile Theft Management (MTM) solution for Education customers
  • Announced Microsoft® will enable Persistence technology in Microsoft Surface 3 devices

F2016 Overview

Key Financial Metrics

  • DDS segment revenue was $86.0 million, representing a year-over-year increase of 4% compared to $82.4 million for F2015. Recurring revenue increased 3% year-over-year and represented 97% of F2016 revenue
  • The DDS commercial ACV Base increased by 5% globally and 6% in North America
  • Net ACV Retention from existing DDS customers was 100% while incremental ACV from new customers was $4.3 million, with corporate and healthcare customers representing $2.6 million of new customer ACV
  • Adjusted EBITDA was $11.1 million, representing 12% of revenue. Adjusted EBITDA includes $1.0 million contributed from the Endpoint and Service Management business unit in Q1-F2016
  • DDS segment Billings of $88.6 million, representing a year-over-year decrease of 1% compared to $89.4 million for F2015
  • Cash from operating activities, prior to $1.3 million of transaction fees related to the sale of the Endpoint and Service Management business unit, was $6.2 million

Operations and Corporate

  • Appointed technology industry veteran Sean Maxwell as Chief Commercial Officer. Mr. Maxwell previously held executive leadership roles at Symantec, Virtual Instruments and EMC
  • Entered into an agreement with Lenovo Asia Pacific to enable automated factory installation and activation of Absolute DDS for Lenovo Asia Pacific customers
  • Expanded partnership with Getac to embed Persistence by Absolute into European rugged mobile devices
  • Launched Absolute's new corporate brand identity which reinforces Absolute's commitment to data and device security
  • Completed the sale of the Absolute Manage and Absolute Service business unit to HEAT Software in October 2015 for gross proceeds of $11.0 million
  • Completed a Substantial Issuer Bid for CAD$50 million in October 2015 with the repurchase of 6,250,000 common shares, or approximately 14% of the Company's outstanding common shares, and repurchased an additional 901,500 shares under the Company's Normal Course Issuer Bid
  • Announced the appointment of Steve Munford, non-executive chairman and former chief executive officer of Sophos to Absolute's advisory board. Mr. Munford joins Art Coviello, former chairman of RSA and executive vice president of EMC, in helping to refine Absolute's information security strategy
  • Strengthened the product leadership team with the additions of Eric Aarrestad as Senior Vice President of Product Management and Todd Wakerley as Senior Vice President of Product Development

Technology and Products

  • Introduced new Absolute DDS security functionality that automatically repairs the Microsoft® System Center Configuration Manager ("SCCM") client installed on an endpoint. This builds on previously released DDS capabilities that monitor and alert on SCCM status
  • Achieved RSA Ready Technical Partner Certification, enabling joint customers to use the Absolute Security Incident Event Management ("SIEM") connector to feed critical Absolute DDS security alert data directly into the RSA Security Analytics platform
  • Announced zero-day Persistence® by Absolute support for Microsoft Windows 10
  • Announced an agreement with Advanced Micro Devices, Inc. ("AMD") to incorporate Persistence® by Absolute into AMD chip designs
  • Announced the release of a new healthcare industry offering. Absolute DDS for Healthcare that provides an additional layer of control to secure healthcare data and devices for more stringent healthcare compliance and regulatory control in the event of a security incident
  • Announced an agreement with Aava Mobile Oy, a leading European mobile device manufacturer, to embed Persistence® technology by Absolute in the firmware of Aava Mobile devices
  • Announced an agreement with Lenovo EMEA to introduce European factory activation of Absolute DDS, enabling customers to load and activate DDS prior to shipment
  • Announced embedded firmware support for the Microsoft Surface Pro 4 and Surface Book devices

"Fiscal 2016 was a breakthrough year for Absolute. Revenue and customer growth were propelled by aggressive product innovation, new go-to-market initiatives, and growing market demand from organizations seeking to protect critical data from external and insider threats," stated Mr. Geoff Haydon, Chief Executive Officer, Absolute. "We finished Q4 strongly, reflected by a 7% increase in revenue and a 19% increase in billings, as larger enterprises took advantage of our innovative and entirely unique endpoint security and data risk management solutions. In fiscal 2017, we will continue to drive towards our long term objective of 20% revenue growth and 20% Adjusted EBITDA margins.  This will involve accelerating investment in R&D, elevating the productivity of our global field investments, and expanding enterprise and third party ISV adoption of our Absolute Persistence-enabled endpoint security solutions."

Q4-F2016 and F2016 Financial Review

Revenue

Total revenue in Q4-F2016 was $22.0 million, representing a 6% decrease from total revenue of $23.3 million in Q4-F2015, with the decrease being attributable to the divestiture of the Endpoint and Service Management segment on October 5, 2015. Absolute DDS and Consumer revenue in Q4-F2016 was $22.0 million, compared to $20.5 million in Q4-F2015, representing a 7% year-over-year increase.

DDS segment revenue from recurring licenses was 97% in Q4-F2016 compared to 99% in Q4-F2015 and was 97% for F2016 compared to 98% in the prior year.

For F2016, total revenue was $88.8 million, representing a decrease of 5% compared to $93.6 million in the prior year.  Absolute DDS and Consumer revenue for F2016 was $86.0 million, representing a 4% increase over $82.4 million in the prior year.

Annual Contract Value(1)

The DDS Commercial ACV Base increased by 3% in Q4-F2016 and increased by 5% in F2016. 

For North America, the DDS ACV Base increased by 2% in Q4-F2016 and increased by 6% in F2016.  Internationally, the DDS ACV Base increased by 6% in Q4-F2016 and decreased by 2% in F2016.  At June 30, 2016 the DDS ACV Base was represented 89% by North American customers and 11% by international customers.

From a vertical perspective, the combined corporate and healthcare DDS ACV Base increased by 3% in Q4-F2016 and increased by 10% in F2016.  The combined education and government DDS ACV Base increased by 2% in Q4-F2016 and increased by 1% in F2016.  At June 30, 2016 the DDS ACV Base was represented 47% by corporate and healthcare customers and 53% by education and government customers.

Net ACV Retention(1) from existing DDS commercial customers was 100% in both Q4-F2016 and full-year F2016.

Incremental ACV from new DDS commercial customers in Q4-F2016 was $1.8 million and was $4.3 million for F2016.  Corporate and healthcare customers represented more than $1 million of the Q4-F2016 new customer ACV and $2.6 million of the F2016 new customer ACV. 

Billings(4)

Absolute DDS and Consumer Billings were $30.1 million in Q4-F2016, representing a 19% increase compared to $25.4 million in Q4-F2015. For F2016, Absolute DDS and Consumer Billings were $88.6 million, down 1% from $89.4 million in the prior year. Billings to commercial customers represented 97% of Q4-F2016 total Billings and 96% of F2016 total Billings. 

Adjusted Operating Expenses(3)  

Adjusted Operating Expenses for Q4-F2016 were $20.1 million, which represented a decrease of 5% compared to $21.2 million in Q4-F2015. The year-over-year decrease reflected foreign exchange-related savings on Canadian-based activities, lower sales consulting expenses, and a $0.5 million positive adjustment to recorded estimates of Canadian Scientific Research and Experimental Development Investment Tax Credits.   

For F2016, Adjusted Operating Expenses were $77.7 million compared to $76.5 million in the prior year, representing a 2% increase. Total headcount was 445 at June 30, 2016 compared to 444 at June 30, 2015. 

Adjusted EBITDA(2) & Net Income

Absolute generated Adjusted EBITDA of $1.9 million in Q4-F2016 and $11.1 million in F2016, down from $2.1 million and $17.1 million in the respective prior year periods. Adjusted EBITDA represented 9% of Q4-F2016 revenue and 12% of F2016 revenue compared to 10% and 18% for the comparable prior year periods. F2016 adjusted EBITDA includes a positive contribution of $1.0 million from the divestiture of Absolute Manage and Service.

The Company recorded a net loss of $1.2 million, or $0.03 per basic share, in Q4-F2016, compared to a net loss of $0.7 million, or $0.02 per basic share, in Q4-F2015.  For F2016 the Company recorded net income of $9.7 million, or $0.24 per basic share, compared to $4.6 million, or $0.10 per basic share, in the prior year.

F2017 Corporate Outlook

Based on its success of delivering targeted product enhancements that directly contributed to sales results in F2016, the Company intends to expand its research and development capabilities to accelerate delivery of new DDS features and functions that are in demand in key vertical markets.  These research and development initiatives, combined with the Company's restructured and strengthened go-to-market capabilities, will support the Company's objective of delivering on its long term growth and profitability objectives.

Revenue

The Company expects total revenue of $92.0 million to $94.6 million, representing 7% to 10% annual DDS segment revenue growth. Revenue is expected to grow at an accelerating rate as we move through the year, driven by increasing new customer acquisition and continuing sales productivity improvements.

Adjusted EBITDA

The Company expects Adjusted EBITDA margins of 5% to 8%, reflecting relatively stable spending across most departments and increased investment in its research and development capacity.

Investment in research and development will accelerate product innovation, as well as the migration of all product offerings to Absolute's next-generation service platform. This will facilitate greater scalability and operating efficiency, support the rapid deployment of new services across Absolute's customer base and liberate resources currently required to support two platforms. 

Cash from Operations

The Company expects cash from operations, prior to payments for income taxes and restructuring charges, as a percentage of revenue to be 8% to 12%, reflecting a double-digit year-over-year increase in Billings. 

Capital expenditures are expected to be between $3.9 million and $4.4 million, with the spending largely related to upgrades and expansion of the Company's hosted data centres, office expansion and ongoing hardware refresh cycles.

Quarterly Dividend
On July 20, 2016, Absolute declared a quarterly dividend of CAD$0.08 per share on the Company's common shares. The dividend is payable in cash on August 26, 2016 to shareholders of record at the close of business on August 5, 2016.

Quarterly Filings
Management's discussion and analysis ("MD&A") and consolidated financial statements and the notes thereto for the year ended June 30, 2016 can be obtained today from Absolute's corporate website at www.absolute.com. The documents will also be available at www.sedar.com.

Notice of Conference Call
Absolute will hold a conference call to discuss the Company's Q4-F2016 results on Friday, August 19, 2016 at 8:30 a.m. ET. All interested parties can join the call by dialing 647-427-7450, or 1-888-231-8191. Please dial-in 15 minutes prior to the call to secure a line.  The conference call will be archived for replay until Friday, August 26, 2016 at midnight.  To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 43130519.

A live audio webcast of the conference call will be available at www.absolute.com and http://bit.ly/2aHScxI.  Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.  An archived replay of the webcast will be available on the Company's website for 90 days.

Non-IFRS Measures and Definitions
Throughout this press release, we refer to a number of measures which we believe are meaningful in the assessment of the Company's performance. All these metrics are non-standard measures under International Financial Reporting Standards ("IFRS"), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS.  For a discussion of the purpose of these non-IFRS measures, please refer to the Company's Fiscal F2016 MD&A on SEDAR at www.SEDAR.com.

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:

1) Commercial ACV Base and Net ACV Retention
As the majority of our customer contracts are sold under multi-year term licenses, there is a significant lag between the timing of the Billing and the associated revenue recognition.  As a result, we focus on the aggregate annualized value of our subscriptions under contract, measured by Annual Contract Value ("ACV"), as an indicator of our future revenues. 

Commercial ACV Base measures the amount of recurring annual revenue we will receive from our commercial customers under contract at a point in time, and therefore is an indicator of our future revenue streams.  Net ACV Retention measures the percentage increase or decrease in the Commercial ACV Base at the end of a period for the customers that comprised the Commercial ACV Base at the beginning of the same period.  This metric provides insight into the effectiveness of our customer retention and expansion functions.

As a result, we believe that increases in the amount of ACV under contract from new customers, and improvement in our Net ACV Retention, will grow our Commercial ACV Base and, in turn, our future revenues.

2) Adjusted EBITDA
Management believes that analyzing operating results exclusive of significant non-cash items or items not controllable in the period provides a useful measure of the Company's performance. The term Adjusted EBITDA refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of acquired intangible assets and property and equipment, foreign exchange gain or loss, share-based compensation, and restructuring charges and post-retirement benefits.  The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of acquired intangibles, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. 

3) Adjusted Operating Expenses
A number of significant non-cash or non-recurring expenses are reported in our Cost of Revenue and Operating Expenses.  Management believes that analyzing these expenses exclusive of these non-cash or non-recurring items provides a useful measure of the cash invested in the operations of its business. The items excluded in the determination of Adjusted Operating Expenses are share-based compensation, amortization of acquired intangible assets, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. For a description of the reasons these items are adjusted, please refer to the "Non-IFRS Measures" section of the June 30, 2016 MD&A.

4) Billings
See the "Subscription Billings" section of the June 30, 2016 MD&A for a detailed discussion of why the Company believes Billings (formerly referred to as "Sales Contracts") provide a meaningful performance metric.  Billings are included in deferred revenue (see Note 10 of the Notes to the Consolidated Financial Statements), and result from invoiced sales of our products and services.

About Absolute

Absolute Software Corporation (TSX: ABT) is the industry standard in persistent endpoint security and data risk management solutions for computers, laptops, tablets and smartphones. Persistence® technology from Absolute provides organizations with visibility and control over all of their devices, regardless of user or location. If an Absolute client is removed from an endpoint, it will automatically reinstall so IT can secure each device and the sensitive data it contains. No other technology can do this. Persistence technology is embedded in the firmware of computers, netbooks, tablets and smartphones by global leaders, including Acer, ASUS, Dell, Fujitsu, HP, Lenovo, Microsoft, Panasonic, Samsung, and Toshiba, and the Company has reselling partnerships with these OEMs and others, including Apple. For more information about Absolute, visit www.absolute.com.

Forward-Looking Statements

This press release contains forward-looking statements and financial outlook that involve risks and uncertainties. These forward-looking statements and financial outlook relate to, among other things, the expected performance, functionality and availability of our services and products, and other expectations, intentions and plans contained in this press release that are not historical facts. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties you should understand that we cannot assure you that the forward-looking statements and financial outlook contained in this press release will be realized. Furthermore, the forward-looking statements and financial outlook contained in this press release are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements and financial outlook, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

©2016 Absolute Software Corporation. All rights reserved. Absolute and Persistence are registered trademarks of Absolute Software Corporation. For patent information, visit www.absolute.com/patents. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.


ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statements of Financial Position
(Expressed in United States dollars) (Unaudited)



June 30, 2016


June 30, 2015








ASSETS














CURRENT








Cash and cash equivalents


$

23,092,852


$

44,105,550


Short-term investments



11,637,085



17,795,777


Trade and other receivables



21,138,351



20,900,965


Prepaid expenses and other



2,379,234



2,200,861


Assets held for sale



-



3,374,672




58,247,522



88,377,825

INVESTMENTS



12,821,302



23,857,518

PROPERTY AND EQUIPMENT



5,853,222



2,846,511

DEFERRED INCOME TAX ASSETS



22,353,391



20,506,391

INTANGIBLE ASSETS AND GOODWILL



15,382,262



14,302,372



$

114,657,699


$

149,890,617








LIABILITIES














CURRENT








Trade and other payables


$

13,942,922


$

15,903,629


Income tax payable



5,990,927



2,042,131


Accrued warranty



460,000



370,000


Liabilities associated with assets held for sale



-



9,394,624


Deferred revenue – current



72,464,399



68,745,515




92,858,248



96,455,899








DEFERRED REVENUE



65,509,763



66,571,210




158,368,011



163,027,109

COMMITMENTS







CONTINGENCIES














SHAREHOLDERS' DEFICIENCY








Share capital



58,607,382



59,607,392


Equity reserve



36,732,175



35,322,483


Deficit



(139,049,869)



(108,066,367)




(43,710,312)



(13,136,492)



$

114,657,699


$

149,890,617

 


 

ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Operations and Comprehensive Income
Three months and year ended June 30, 2016 and 2015
(Expressed in United States dollars) (Unaudited)




Three months ended

June 30,


Year ended

June 30,



2016


2015


2016


2015



























REVENUE


$

22,014,524


$

23,306,740


$

88,798,508


$

93,649,910














COST OF REVENUE



3,796,794



4,368,336



13,827,785



17,745,310














GROSS MARGIN



18,217,730



18,938,404



74,970,723



75,904,600














OPERATING EXPENSES














Sales and marketing



11,329,061



11,788,981



44,834,872



42,278,278


Research and development



2,957,048



3,254,073



12,396,394



11,492,977


General and administration



2,796,982



2,683,904



10,304,742



10,022,041


Share-based compensation



1,075,013



1,047,995



4,668,476



3,615,414




18,158,104



18,774,953



72,204,484



67,408,710














OPERATING INCOME



59,626



163,451



2,766,239



8,495,890














OTHER INCOME (EXPENSE)














Interest income, net



60,074



89,662



292,602



223,426


Foreign exchange gain (loss)



(58,350)



(69,360)



(684,225)



(477,621)


Gain on disposal of business unit



-



-



14,098,066



-




1,724



20,302



13,706,443



(254,195)














NET INCOME BEFORE INCOME TAXES



61,350



183,753



16,472,682



8,241,695














INCOME TAX EXPENSE



(1,276,000)



(907,400)



(6,744,000)



(3,626,400)














NET (LOSS) INCOME AND

COMPREHENSIVE (LOSS) INCOME


$

(1,214,650)


$

(723,647)


$

9,728,682


$

4,615,295














BASIC (LOSS) INCOME PER SHARE


$

(0.03)


$

(0.02)


$

0.24


$

0.10

DILUTED (LOSS) INCOME PER SHARE


$

(0.03)


$

(0.02)


$

0.23


$

0.10














WEIGHTED AVERAGE NUMBER OF

COMMON SHARES OUTSTANDING,
BASIC



38,827,732



44,828,181



40,486,922



44,274,894

 


 

ABSOLUTE SOFTWARE CORPORATION
Consolidated Statement of Changes in Shareholders' Deficiency
(Expressed in United States dollars) (Unaudited)










Share Capital








Number of
Common
shares


Amount


Equity reserve


Deficit


Total















BALANCE, JUNE 30, 2014

43,796,215


$

52,403,258


$

35,141,530


$

(97,520,919)


$

(9,976,131)

Shares issued on options exercised

1,222,801



6,989,914



(2,247,159)



-



4,742,755

Shares issued on non-standard options exercised

52,250



385,290



(140,388)



-



244,902

Shares issued under Employee Share Purchase Plan

140,479



734,095



-



-



734,095

Shares issued under Phantom Share Unit plan

50,000



406,443



(406,443)



-



-

Shares repurchased and cancelled under the Normal

Course Issuer Bid

(399,401)



(509,359)



-



(1,883,076)



(2,392,435)

Shares committed to be repurchased under the Normal

Course Issuer Bid

-



(802,249)



-



(3,136,278)



(3,938,527)

Share-based compensation expense

-



-



2,974,943



-



2,974,943

Dividends paid

-



-



-



(10,141,389)



(10,141,389)

Net income and total comprehensive income

-



-



-



4,615,295



4,615,295

BALANCE, JUNE 30, 2015

44,862,344


$

59,607,392


$

35,322,483


$

(108,066,367)


$

(13,136,492)

Shares issued on options exercised

884,050



4,969,839



(1,751,984)



-



3,217,855

Shares issued under Employee Share Purchase Plan

125,861



621,880



-



-



621,880

Shares issued under Phantom Share Unit plan

160,552



1,516,167



(1,100,692)



-



415,475

Shares repurchased and cancelled under the Normal

Course Issuer Bid

(901,500)



(422,002)



-



(847,333)



(1,269,335)

Shares repurchased and cancelled under the
Substantial
Issuer Bid

(6,250,000)



(7,685,894)



-



(30,603,647)



(38,289,541)

Share-based compensation expense

-



-



4,262,368



-



4,262,368

Dividends paid

-



-



-



(9,261,204)



(9,261,204)

Net income and total comprehensive income

-



-



-



9,728,682



9,728,682

BALANCE, JUNE 30, 2016

38,881,307


$

58,607,382


$

36,732,175


$

(139,049,869)


$

(43,710,312)

 

 

ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Cash Flows
Three months and year ended June 30, 2016 and 2015
(Expressed in United States dollars) (Unaudited)








Three months ended

June 30,


Year ended

June 30,



2016


2015


2016


2015














OPERATING ACTIVITIES














Net (loss) income


$

(1,214,650)


$

(723,647)


$

9,728,682


$

4,615,295


Items not involving cash















Amortization of property and equipment



644,696



406,539



2,255,603



1,643,054



Amortization of acquired intangible assets



125,761



465,360



631,120



3,391,733



Amortization of intangible assets – contract costs and brand



2,173,513



1,892,514



7,921,629



7,203,631



Share-based compensation



1,075,013



873,752



4,262,364



2,974,943



Deferred income taxes



(1,572,000)



(1,365,344)



(1,847,000)



(705,344)



Gain on disposal of business unit



-



-



(14,098,066)



-



Transaction fees on disposal of business unit



-



-



(1,257,910)



-



Non-cash interest and amortization

of investment premium



257,312



144,982



696,032



669,980


Change in non-cash working capital















Trade and other receivables



(10,028,453)



(7,142,770)



(237,386)



1,110,280



Prepaid expenses and other



(84,992)



401,772



(178,373)



(283,196)



Intangible assets – contract costs and brand additions



(3,212,196)



(2,434,540)



(10,388,335)



(9,200,813)



Trade and other payables



601,109



2,369,779



1,619,648



1,800,161



Income taxes payable



1,508,139



2,042,131



3,948,796



2,042,131



Accrued warranty



110,000



90,000



90,000



10,000



Deferred revenue



8,063,228



5,670,622



1,726,754



7,748,619














CASH (USED IN) FROM OPERATING ACTIVITIES



(1,553,520)



2,691,150



4,873,558



23,020,474

INVESTING ACTIVITIES














Purchase of property and equipment



(1,683,055)



(897,856)



(3,370,497)



(2,909,388)


Purchase of intangible assets



-



-



(225,000)



(387,436)


Proceeds from disposal of business unit



-



-



11,046,737



-


Proceeds from maturities of short-term investments



5,000,000



7,500,000



16,700,000



21,450,000


Purchase of short-term investments



-



-



-



(5,122,700)


Purchase of investments



-



(7,724,252)



(201,124)



(25,998,079)














CASH FROM (USED IN) INVESTING ACTIVITIES



3,316,945



(1,122,108)



23,950,116



(12,967,603)

FINANCING ACTIVITIES














Repurchase of common shares for cancellation



(423,780)



(2,555,406)



(43,501,944)



(2,392,435)


Dividends paid



(2,360,025)



418,527



(9,261,204)



(10,141,389)


Issuance of common shares



471,417



(108,717)



3,658,654



5,978,035














CASH USED IN FINANCING ACTIVITIES



(2,312,388)



(2,245,596)



(49,104,494)



(6,555,789)














FOREIGN EXCHANGE EFFECT ON CASH



(52,077)



(40,160)



(731,878)



(320,071)














(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS



(601,040)



(716,714)



(21,012,698)



3,177,011














CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD



23,693,892



44,822,264



44,105,550



40,928,539














CASH AND CASH EQUIVALENTS, END OF PERIOD


$

23,092,852


$

44,105,550


$

23,092,852


$

44,105,550

 

SOURCE Absolute Software Corporation

For further information: Public Relations: Becky Obbema, Interprose, becky.obbema@interprosepr.com or 1 408 778 2024; Investor Relations: Kristen Dickson, NATIONAL Equicom, kdickson@national.ca or 1 416 848 1429


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